How to Maintain Financial Stability During a Career Transition

Did you know the average person changes careers between 5 and 7 times during their lifetime? Just because it's normal doesn't mean it will have an insignificant impact. A career change (whether by choice or unexpected) can be stressful and disruptive. With this changeup, there can be the addition of financial stress with income or benefit changes. By having a financial plan in place, you can feel stable even through the rough waters of a new job or unemployment. How should your financial goals change if you are facing a career transition?

Assess Your Income

What do your current expenses look like leading into this career change? Were you previously living within your means? An income change with a new career means taking a critical look at your budget and spending habits to see if there can be any cuts. There might be a need to dip into your savings. Do you have a fund in place in case of an emergency? Emergency funds can make or break your financial situation when you are facing a moment of uncertainty.

Looking at how much is in your savings and calculating how long you could realistically live on that cushion is crucial. This is why planning ahead for incidents like this can make or break you when you are facing a moment of crisis or uncertainty. 

Create a Transition Budget 

Since your income is different, your transition period budget should be, too. Think about the essential expenses you need to cover until you secure another position. This should include basic needs like rent, groceries, and utilities you require for your day-to-day. Your transition budget should be priority-based, starting with the absolute essentials. 

During this season, avoid both large and small financial commitments. Even a simple change can add up over time and change how much income you have available to you. 

Some examples include:

• Cancelling streaming services and utilizing free platforms
• Moving from dining out to meal prepping
• Downloading a library app instead of buying books
• Making coffee at home
• Buying secondhand through thrift stores or consignment stores
• Making a list when grocery shopping (and sticking to it)
• Researching “free fun,” such as local parks, community festivals, or events

Vacations, new cars, and other luxuries can wait until your income is stable again and can be goals to save for.

Explore Income Alternatives

Are there any opportunities available to earn extra income? Freelance and part-time work might put something extra in your pocket to make the transition smoother. Think about your special skills and how you can use them. On this new career path, you may find skills that you can use and help you discover other opportunities.

Unemployment benefits are also available for those facing economic uncertainty, and you can conveniently apply online. Search for what benefits you qualify for and take the time to fill out any forms promptly, as there could be processing delays that will make payments take longer while you are looking for a new potential employer. 

Stay on Track with Long-Term Financial Goals

If you had been working to pay off debt, contact lenders to talk about modifying payments or deferment. Continue to prioritize your high-interest debt, and if you can continue to make payments, make sure to do so to avoid any long-term effects. Adjust your retirement savings contributions if necessary, and make sure you are maintaining good habits with your credit to not impact your credit score. 

A Free Resource For You

While thinking about your financial goals, take a moment to download our free resource: A Beginner’s Guide to Establishing Savings. Saving is the foundation of a strong financial future, and this guide was created to help you take that first step with confidence. It’s designed to show you simple, practical ways to start building your savings, because every great plan starts with a solid base.

Lean on Leaders Credit Union for Support

Leaders Credit Union is your ally in your personal finances in both times of stress and personal milestones. During your career transition, you’ll have access to our financial counseling to help you manage your situation while still keeping your future in mind. In our online banking, you’ll find budget tracking, goal-setting tools, and more to reinforce your financial stability during your job transition. 

We want you to take proactive steps and seek professional financial advice rather than facing it alone in your financial wellness efforts. Ready to talk? Schedule an appointment with one of our Financial Champions. 

Leaders Credit Union is federally insured by the NCUA.